Redundancy

When are you entitled to a redundancy payment?

Exceptional situation of termination of employment entitles to a redundancy payment. To qualify for a redundancy payment, the position must be made redundant.

A job reduction generally occurs when a certain position is no longer in existence and no other employee takes up that position. In other words, the work we were doing ceases to exist and as a result we lose our job.

In any other situation – termination of the employment contract: by mutual consent, termination of the employment contract by disciplinary action, resignation by the employee (even in circumstances where the employer is at fault) do not give grounds to claim redundancy payment. In these cases, the employee may be entitled to compensation for unfair dismissal/ termination of the employment contract.

The amount of the redundancy payment

Under the legal regulations for redundancy payments, all entitled employees may receive a statutory one-off redundancy payment. An employee is entitled to two weeks’ pay for each year of work with a weekly bonus, which may not exceed a maximum gross weekly wage of €600. An employee with 3 years’ service is entitled to 7 weeks’ redundancy pay (two weeks for each year of service and one bonus), an employee with 10 years’ service is entitled to 21 weeks’ of redundancy payment. Workplace agreements involving job reductions and voluntary redundancies may provide higher redundancy payments (e.g. more weeks for each year of service).

Entitlement to the redundancy payment shall be subject to at least two years’ continued service (104 weeks). The employer is obliged to notify the employee of a redundancy with an appropriate notice depending on the length of service in accordance with the Minimum Notice Act and the employment terms and conditions or the contract.

Lack of redundancy payment by the employer

If the employer does not have enough funds to pay the redundancy payment, he can apply to a specific state fund, which will cover the redundancy payment for the employer. The requirement is to provide: either proof of lack of financial resources with an undertaking by the employer to return those resources or an appropriate court decision awarding the redundancy payment.

Lay-off or short-time

The employer has the right to lay-off an employee or put him on short-time (this means reducing the working time by at least half) if there is no or not enough work for the employee, but the employer expects such work to be available soon.

An employee who has been laid off or put on short-time work is obliged to wait for at least 4 weeks (or 6 intermittent weeks in the last 3 months). After this time, the employee has the right to terminate the employment with the right to a redundancy payment, unless the employer offers him/her the work again within the prescribed time limit and with the appropriate procedures.

The selection of employees to be laid off or put on short-time work must be fair – the same as any selection for redundancies.

Claiming your rights

Employees have the right to submit a complaint under a number of employment acts regarding contracts of employment, remuneration, breaches of working time regulations, etc. The basic time limit for submitting a complaint to the WRC – Workplace Relations Commission is 6 months. It is not true that claims can wait until the end of employment contract (in such a case the complaint can cover the last 6 months of the employment). It is possible to extend the time limit for a complaint to 12 months – but certain conditions must be complied with. Ignorance of the law or the language barrier are not considered to be grounds for applying for an extension of the complaint time limit.

In cases of breaches of the redundancy payment regulations, the following claims are applicable:

• Claim for redundancy payment following job reduction
• Claim for redundancy payment when the employment has been terminated after lay-off or short time work
• Claim for compensation for unfair dismissal (if the reason of making a position redundant is untrue or an employee was unfairly selected for redundancy)